MARKET WATCH: Art market news and commentary by the staff of Art+Auction

Part of the inherent definition of street art is that it is, by nature, public. It appears on the sides of buildings and on sidewalks, in doorways and on concrete blocks. It most often appears in urban neighborhoods, and tends to lend itself to some sort of social commentary. The illicit nature of the craft is in itself subversive and, as a corollary, non-commercial. Or it was anyway.

In recent years, street art has become gritty-chic, touted by the likes of Kate Moss, and therefore increasingly popular as a collecting category. Original works by Banksy, probably the most important street artist of the last twenty years, now fetch six figures at auction. It was only a matter of time before people started ripping down walls to, quite literally, extract the value from them.

Last week, in her book review of “Banksy: The Man Behind the Wall,” ARTINFO’s Rachel Corbett wrote about about how he helped popularize the idea of finding commercial success as a street artist:

“What Banksy and [his business partner, Steve] Lazarides had done together was create a market for street art where none had existed before,” [Will] Ellsworth-Jones writes. Since 2002, prints from Banksy’s first official edition, “Rude Copper,” have gone from £40 apiece to as high as £13,000 today. Ultimately Banksy and Lazarides parted ways, and his new sales and authentication company, Pest Control, has proved even more profitable, reporting £1.1 million in assets in 2010.

These commercial works are generally editions deliberately created to be sold after a street artist has already gained popularity stenciling or painting on urban building walls. But it doesn’t always happen that way. Yesterday, ARTINFO reported that an original Banksy mural — poking fun at the fanfare surrounding Queen Elizabeth‘s 60th anniversary Diamond Jubilee celebration last year — had been cut down from a wall in North London and appeared at an auction in Miami, estimated for $500,000-700,000. Today it came out that Arts Council England attempted to stop the sale, but found that they had no legal recourse to do so. Even though the work was probably stolen off the wall, the ACE has not yet been able to contact the owners of the building to verify that it was taken down illegally. Furthermore, it is unclear that any export laws were broken.

The New York Times contacted the auction house, Fine Art Auctions Miami, which assured the paper that it had acquired the work in good faith, but would not give up any details on how it came to have the mural in its possession.

“Fine Art Auctions Miami has done all the necessarily due diligence about the ownership of the work,” a spokeswoman for the house said on Wednesday morning. “Unfortunately we are not able to provide you with any information, by law and contract, about any details of this consignment. We are more than happy to do so if you can prove that the works were removed and acquired illegally.”

At this point, it seems there is little to be done but wait to see what happens next. There are so many legal gray areas in this case that it’s hard to see a future other than a broken piece of North London disappearing into some wealthy collector’s guarded enclave forever (or at least until Bansky prices spike again and it shows up at another auction house).